Movement overnight remained choppy amid thin month-end trade after yesterday's U.S. Thanksgiving holiday. USD-JPY and the JPY crosses maintained a bid tone as market participants digested a heavy Japanese data schedule. The numbers broadly reinforced expectations that CPI is improving and the economic recovery is intact. EUR and GBP maintained a bid tone against the USD, leaving the pairs above 1.3600 and 1.6350, respectively into the European open. AUD continued to run into supply on strength and got another kick lower as the government regulator rejected the U.S. ADM takeover of Australia's Graincorp. Other data releases included an unexpected dip in U.K. GfK consumer confidence to -12 in November from -11 in October. Australia private-sector credit rose 0.3% m/m as expected and housing credit gained 0.5% m/m. NZ new dwelling consents recorded the first fall in three months by 0.6% m/m, but was still 17% higher on the year.

[EUR, USD]EUR-USD pushed back up to the 1.3620 area amid EUR-JPY and EUR-AUD demand, along with a bullish technical backdrop. Light profit taking went through in the latter part of the Asia session, but it did not do much damage to the underlying trend, which points to an eventual test on option exposure through 1.3650 and towards the 1.3700 area. There is still resistance to negotiate near 1.3630 and offers are likely to be fairly thick towards the mid-1.36 region.

[USD, JPY]USD-JPY and the JPY crosses were well supported early on amid importer demand for dollars and speculative fund demand for EUR and GBP. AUD and NZD saw mixed flows, with Japanese names running into hedge fund supply. The dollar pairing carved out a new trend high above 102.50, but fell back in line with profit taking via the Nikkei, leaving it at 102.20-30 late on. The bias remains with the topside on BoJ and Fed policy expectations into Q1 2014. However, very heavy option exposure at 103.00-25 is due to run until December-20 and is expected to be defended with large amounts and it may be a different proposition to the interest that gave way at 102.00-50.

[GBP, USD]GBP maintained a bid tone after it extended to new trend highs on Thursday. There was mixed action due to month-end related activity. However, overall GBP remained buoyant and Cable move above 1.6300. The BoE's Financial Stability Review noted the pick up in house price inflation, but did not think it represented a threat to stability currently. However, the funding for lending scheme from January 2014 will be refocused solely on SME lending as the housing market no longer needs support. The market took this as a tightening, but it will also mean that the BoE can keep macro policy unchanged for as long possible.

[USD, CHF]EUR-CHF held firm in front of 1.2300. Fluctuations between EUR and USD are still driving intra-day moves. The EUR-USD move over 1.3600 left USD-CHF near 0.9050, leaving EUR-CHF net unchanged for the move part. Specs have also been reluctant to press the downside aggressively due to demand ahead of 1.2280, which has held since early October. Since then the SNB have reiterated its policy stance, which we think is a warning to the market not to test the SNB resolve.

[USD, CAD]USD-CAD edged up to 1.0600 as positive momentum fueled a move up from 1.0585 overnight. There was a modest correction from new trend highs just over 1.0600 on Thursday, which ran its course, leaving bias on a test of 2013 highs at 1.0609 from July-5. Adding to the softer CAD$ tone is the downturn in oil prices, which could have further to run as a persistent build in inventories raises concerns over the demand outlook. With these influences in mind a U.S. house tipped a USD-CAD move to 1.1400 this week in one of its top-10 trades for 2014.